Chris Lombardi puts defense and security under the spotlight, as he shares his takes on recent NATO and EU cooperation and provides insight into the company’s own long-term strategic partnerships in Europe.

Three trends are currently driving the global electricity sector: decarbonization, decentralization and differentiation. Utilities are making significant contributions to mitigate carbon emissions, while a technology revolution is …

Interest rates cut

Four central banks, including the ECB, make deep cuts in interest rates as fresh figures show the European economy contracted by 0.2% in the third quarter.

European Voice

12/4/08, 12:49 PM CET

Updated 5/19/14, 1:57 PM CET

The European Central Bank and three national banks today cut interest rates in another flurry of moves intended to encourage spending and stimulate the European economy.

Three of the cuts were historic: The European Central Bank’s 75 basis-point cut was the largest it has made since it was created nearly 11 years ago. The Bank of England’s decision to lop another 100 basis points off its benchmark rate took the value of saving to just 2.0%, the lowest level since 1951. And the 175 basis point cut made by Sweden’s Riksbank was the bank’s most decisive move in 16 years. It leaves the interest available to Swedish savers at just 2.0%.

The ECB’s rate is now 2.5%. A cut had been expected, but most speculation suggested it would be of 50 basis points. The Bank of England’s major reduction followed a huge 150 basis point cut in November.

Denmark’s Nationalbanken swiftly followed the ECB by lowering its headline rate by 75 basis points, taking its reference savings rate to 4.25%.

This is the third time in as many months that the ECB has lowered its rates, marking a shift in its focus away from inflation to growth. The choice has been eased by a big drop in inflation rates, which Jean-Claude Trichet, the ECB’s president, said today was “due mainly to the fall in commodity prices and a significant slowdown in economic activity”. Inflation in the eurozone is now 2.1%, close to the ECB’s long-standing long-term target.

“Tensions have increasingly spilled over from the financial sector into the real economy and the world economy as a whole is feeling their adverse effects,” Trichet said.

The decision came on a day that saw Eurostat, the EU’s statistical office, publish preliminary figures suggesting that gross domestic product (GDP) declined by 0.2% in both the 15-member eurozone and the 27-member EU in the three months to September. This dynamic, which was worse than in the second quarter of the year, reduced the eurozone’s 12-month growth figures from 1.4% in June to 0.6% in September. In the EU as a whole, annual growth was 0.8%, down from 1.7% in mid-2008.

The UK’s economy also faces hard times. The Organisation for Economic Cooperation and Development (OECD) predicted in late November that the second-largest economy in Europe could contract by 1.1% in 2009. The 0.5% fall in GDP in the third quarter of this year was its first drop since 1992.

The Danish government expects the country’s economy to shrink in both 2009 and 2010.

France said today that it will make €26 billion available in a bid to stimulate its faltering economy. The package focuses on investment, including major infrastructure projects. Paris hopes the stimulus will create new jobs. The unemployment rate currently stands at 7.7%, a figure that could rise as the crisis digs deeper. The French government’s figures suggest the measures could add 0.6 percent to its gross domestic product in 2009, and take its deficit up to 3.9%.